The 1-2-3 Money Plan Part 14

Little Things Mean a Lot, 1-2-3.

1. Replace your five most-used bulbs with CFLs (compact fluorescent lamps).

2. Buy rechargeable batteries.

3. Don't buy bottled water.

1. Replace Your Five Most-Used Bulbs with CFLs.

I was watching a TV rerun of the sitcom Friends when the inferiority of the traditional incandescent light bulbs struck me. The character Monica, a chef on the show, was reminiscing that as a child she cooked with an Easy-Bake Oven.

The child's toy Easy-Bake Oven bakes cookies and cakes with a 100-watt incandescent light bulb. Think about that. The Easy-Bake Oven is possible because traditional light bulbs are actually small heaters that happen to give off some light. They are wildly inefficient ways to illuminate a room. It's 130-year-old technology.

Meanwhile, compact fluorescent lamps, CFLs, are so much better than they used to be. They're definitely worth a try.

Each CFL will save you $30 to $50 over its life, compared with an incandescent bulb. That's because CFLs use one-quarter of the electricity. The energy savings more than make up for the higher purchase price. And they last 10 times longer than incandescents. I bought CFLs that say on the package they are guaranteed to last nine years-not nine months-nine years.

How's the quality? Quite good, actually. Problems with flickering, humming, and giving off poor color light have all been remedied. Lights might turn on a little slowly and take several seconds to get to full brightness. But I don't find that to be a big problem. In fact, it's less jarring than having immediate brightness.

The important point here is to at least try them. Start by replacing bulbs in your five most-used lights. The best deals are buying multipacks of CFLs at warehouse clubs and home centers.

Avoid putting CFLs in lights with dimmer switches. Though some CFLs are made for dimmable lights, the bulbs lag behind in quality compared with incandescent. The biggest problem is the range of dimming, which is narrow. It's like having a dimming range of full, half, and off, rather than all the brightness levels in between.

A minor environmental drawback of CFLs is they contain a tiny amount of mercury. It's best not to throw them in the trash. Instead, go online to Earth911.org to find out where to drop them off for disposal. As of this writing, a few national retailers, such as Home Depot and RadioShack, will take them.

CFLs are really just a transitional technology, until we get LED (light-emitting diode) bulbs, which use even less power, last longer, give off better light, and don't have the mercury problem. But we're not there yet. Until we are, CFLs are a great way to go.

QUICK TIP.

Another way to save electricity is to kill the vampires. Vampire appliances are neither fully on, nor fully off, existing in a kind of undead state. Examples of vampires are computers, DVD players, VCRs, TVs, battery chargers, and cable and satellite TV boxes.

They secretly suck electricity, day and night, even when powered off. This "standby loss" bleeds dollars from your wallet and wastes electricity. Did you know that over its life, a microwave oven consumes more energy powering its clock than it does cooking food? For electronics grouped together, use a power strip, which allows you to flip a switch on the strip to cut all power to the components.

2. Buy Rechargeable Batteries.

Like CFLs, rechargeable batteries have gotten a lot better recently. They're worth trying because you can save money and avoid a lot of AA and AAA batteries and their packaging ending up in landfills.

Rechargeable batteries are more expensive up front, but far cheaper over the long run, even factoring in the cost of the charger and minimal electricity used. And today, rechargeables last longer on a charge than a regular disposable alkaline.

The big drawback had always been that traditional rechargeable batteries lose battery power while idle. So, if your digital camera has been sitting in a drawer for a few months, its rechargeable batteries could be drained when you need it to capture an unexpected great moment.

Enter the new breed of rechargeables, called hybrids or precharged batteries. These nickel metal hydride (NiMH) cells come already charged and lose power at a slow rate, maintaining 85 percent of their charge, even after sitting idle for a year. You can recharge batteries literally hundreds of times.

Here's how four rechargeable AA batteries could save you nearly $2,000.

Four AA rechargeable batteries that yielded 500 charges each would cost $50, including the cost of the charger. Electricity cost for charging is negligible, literally a few pennies.

The equivalent would be buying 2,000 disposable batteries. At $1 each, that's $2,000.

Net savings is $1,950.

I bought a brand that was one of the pioneers in the hybrid rechargeables, the Sanyo Eneloop. They work quite well. They're especially good for devices that eat through batteries, such as computer mice, video-game controllers, and cameras.

You should recycle rechargeables. Fortunately, it's easy. You can drop them off at such retailers as Sears, RadioShack, Home Depot, Lowe's, Staples, and OfficeMax. See call2recycle.org for a list of battery recyclers near you.

QUICK TIP.

Whether you use disposables or rechargeable batteries, it makes sense to invest in a battery tester. Some are as cheap as $5. A voltmeter or battery tester can determine which in a group of batteries is the dud, so you don't have to replace all batteries in a multibattery device.

3. Don't Buy Bottled Water.

There's only one beverage for humans that literally falls from the sky for free. It's water. Water is the only beverage that's so common and inexpensive that you can drink as much as you want from a public fountain and n.o.body cares.

Yet, somehow beverage companies persuaded Americans to pay good money for a free product, all because they put it in a bottle for you. Mind you, this is a product that requires you to go to the store, load heavy cases into your shopping cart, pay real money for a virtually free product, and lug it home.

Test after test shows that bottled water does not taste better than tap water, nor is it safer from contaminants. Tap water in most parts of the United States is very high quality. In fact, much of the bottled water sold, including from brands Aquafina and Dasani, comes from munic.i.p.al tap water, not mountain springs or glaciers or whatever else is pictured on the bottle's label.

If your home tap water has an off taste, filter it. A cheap pitcher-style filter works great.

If you want to spend money to drink water and make a social statement, consider drinking tap water or filtered tap water from a fancy water bottle. A quick Internet search finds several water-bottle retailers including Mysigg.com and kleankanteen.com. Bottles from NewWaveEnviro.com are made from corn and biodegrade in 80 days. Bottles from Aquamira.com and thewatergeeks.com have filters built into the bottle.

Not only is paying for bottled water hard on your pocketbook-some households spend more than $1,000 a year-it's hard on the environment. There's making the bottle in the first place, which requires oil. Then there's emissions and fuel consumption by trucks that transport the bottled water. And then there's disposing of the bottle, many of which are not recycled.

QUICK TIP.

Part of the hazard of bottled water is throwing the disposable bottle "away." The problem is: There is no "away." That points to a broader issue about usable stuff ending up in landfills. Profit from your would-be junk by selling it on eBay.com or Craigslist.com. Give it away via freecycle.org or get a tax deduction by donating to local charities or thrift shops.

Really, this advice about bottled water is a metaphor for all kinds of unnecessary spending on disposable products-plates, cups, napkins, paper towels, and a wide host of other products.

Choose to reuse. You wallet and Mother Earth will thank you.

For more energy-saving tips, go online to the Alliance to Save Energy, ase.org; the U.S. energy department's energy-efficiency site for consumers, www.eere.energy.gov/consumer; the American Council for an Energy-Efficient Economy, aceee.org; and the Energy Star program, www.energystar.gov.

Should You Buy Carbon Offsets?.

A popular exercise nowadays is to measure your carbon footprint. That estimates how much you are emitting in greenhouse gases by heating your home, driving your car, and flying on airplanes, for example.

The antidote, some say, is to buy carbon offsets. A carbon offset is essentially a promise that your money will help pay for projects that reduce greenhouse gases.

The average person who puts 10 tons of carbon dioxide into the atmosphere a year might offset that impact by buying $150 worth of carbon credits. Prices vary widely. The money goes toward such projects as planting trees, building wind-power projects, and capturing and destroying methane from landfills and dairy farms. The idea is to pay for the emissions damage you cause so your existence on the planet is carbon neutral.

But as a consumer, is buying carbon credits spending smart?

I'm not a fan.

First, critics are right to fear that some people will throw money at the problem to alleviate their guilt without changing their behaviors-write a check and hop in the Hummer to go to work. Second, there are too few good ways to be sure your money is being used wisely.

Far more effective than purchasing carbon offsets is reducing your personal consumption by using some of the tips in this chapter.

PART II Spending Smart Yesterday.

Chapter 6.

Credit When Credit's Due.

Credit is an increasingly important component of money management nowadays, whether you borrow money or not. That's why it's important to care about your credit reports, your credit scores, and your credit cards, if you use them.

This has never been truer since the whole financial world started to reexamine the loose lending standards that led to tumult in the financial markets in late 2008. The days of easy credit, given to anybody who can fog a mirror, are gone.

Credit scores are intended to define how creditworthy you are. Can lenders trust you to pay back borrowed money on time? That's all creditworthiness is. The more trustworthy you are, according to a credit-scoring formula, the more likely you'll get a loan in the first place and the more likely you'll get a lower interest rate than less trustworthy people.

Your Credit.

Unless you've been living under a rock, you have heard about credit reports and credit scores. They're not particularly new. But in recent years, the companies you do business with use reports and scores a lot more. And, though credit reports were once-secret dossiers about your money life, consumers today have more information gathered and stored about them than ever before.

Your Credit, 1-2-3.

1. Get your credit reports. Go online to www.AnnualCreditReport.com and retrieve your free credit reports. Dispute errors.

2. Get your credit scores (optional). If you'll be applying for an important loan soon, pay to get your "FICO" credit scores at www.MyFico.com.

3. Improve your scores. Review what goes into a credit rating and take steps to improve your FICO score.

What Is a Credit Rating?